Starting news article english 5 July 2010

Clifford Chance provides a legal opinion on the proposed new nuclear power tax

A legal opinion prepared by the international law firm Clifford Chance concludes that the German federal government's proposed tax on nuclear fuel elements, a tax which it plans to levy on nuclear fuel rod consumption or power generated therefrom, is incompatible with EU tax law. The Federal Ministry of Finance has announced that a draft bill on the tax is set to be tabled in mid-July this year.

Dr. Marc Scheunemann, tax practice partner at Clifford Chance's Düsseldorf office, commented that "should the nuclear power tax constitute a consumption tax linked to power generated therefrom, this would constitute a de facto increase in a tax on electricity generated from nuclear energy. Singling out electricity generated from nuclear power sources for a tax increase while exempting electricity generated from alternative energy sources is incompatible with EU tax law. The Member States are obligated to set and apply uniform tax rates for the relevant energy products. Different tax rates are fundamentally unlawful."

In response to various press inquiries, Dr. Peter Rosin, partner at Clifford Chance's Düsseldorf office, head of the German Energy Law Practice Group and the firm's international "Power Group", pointed out that the legal opinion had not been prepared in accordance with client instructions: "As a leading energy law firm, we are often at the vanguard of promoting discussions on energy law and energy policy and providing our legal opinion thereon."

Clifford Chance will be hosting a nuclear energy law seminar at its Düsseldorf office on 14 July 2010 in which it will provide in-depth analysis of the nuclear fuel tax issue along with other energy law issues.